Interim Report for the period ended 30 June 2026

Shawbrook posts 16% profit growth and improved efficiency, backed by strong financial disclosure.

Risk flags

• ●Impairment charges rose to £50.7 million in H1 2026 from £32.6 million in H1 2025, indicating higher credit costs that could signal emerging asset quality pressures if the trend continues.
• ●The arrears ratio increased slightly to 1.7% from 1.6%, suggesting a modest uptick in overdue loans that warrants monitoring for potential deterioration in credit quality.
• ●The announcement lacks segment-level breakdowns or detailed risk commentary, limiting visibility into the sources of profit, risk concentration, or the impact of macroeconomic headwinds on specific business lines.

Bottom line

Shawbrook's interim results show robust profit growth, improved efficiency, and strengthened capital ratios, with most headline claims supported by detailed financial disclosure. The completed AT1 issuance and OTD transactions have already contributed to capital and income, reducing execution risk on these fronts. Rising impairments and a higher arrears ratio are early signs of potential credit risk, though current levels remain manageable. The absence of segment-level detail or granular risk disclosure means investors cannot fully assess the sustainability or concentration of earnings. Forward guidance for continued growth and a maiden dividend is credible given the current trajectory, but future disclosures should address credit quality trends and segment profitability. The key takeaway is that Shawbrook is delivering on its core financial targets, but investors should watch for any acceleration in credit losses or changes in loan book composition.

Announcement summary

(LSE/AIM:SHAW) Shawbrook Group plc reported underlying profit before tax of £195.5 million for the six months ended 30 June 2026, representing a 16% increase from H1 2025. The underlying return on tangible equity was 18.1%, and the loan book (including originate-to-distribute) grew to £20.1 billion, a 10% annualised increase. Customer deposits rose to £18.8 billion, while the cost to income ratio improved to 36.4% from 40.0% a year earlier. The Group issued a £250 million AT1 instrument and completed two OTD transactions totalling £1.3 billion, including the £0.8 billion Aldbrook Mortgage Transaction 2026-1 and the £0.5 billion Lanebrook 2024-1 transaction, resulting in a £25.8 million gain on sale. Impairments were £50.7 million, and the arrears ratio was 1.7%. The company projects a loan book of c.£21 billion and a CET1 ratio of 13.2% (pre-Basel 3.1) for FY 2026, and plans to pay a maiden ordinary dividend in FY 2027 in respect of FY 2026 earnings.

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